Market trades in positive terrain

Key benchmark indices retained positive zone in mid-morning trade. At 11:16 IST, the barometer index, the S&P BSE Sensex, was up 46.93 points or 0.19% at 25,348.83. The Nifty 50 index was currently up 17.10 points or 0.22% at 7,766.80. The Sensex fell 1.42 points, or 0.01% at the day's low of 25,300.48 in mid-morning trade. The barometer index jumped 217.36 points, or 0.86% at the day's high of 25,519.26 in early trade, its highest level since 19 May 2016. The Nifty rose 6.60 points, or 0.09% at the day's low of 7,756.30 in mid-morning trade. The index rose 70.90 points, or 0.91% at the day's high of 7,820.60 in early trade, its highest level since 19 May 2016.

The market breadth indicating the overall health of the market was positive. On BSE, 1,115 shares rose and 953 shares fell. A total of 130 shares were unchanged. The BSE Mid-Cap index was currently up 0.36%. The BSE Small-Cap index was currently up 0.32%. Both these indices outperformed the Sensex.

In the overseas stock markets, most Asia stocks edged higher after US shares registered gains during the previous trading session on Friday, 20 May 2016. US stocks edged higher on Friday, 20 May 2016, after strong housing data for April 2016. Existing-home sales rose 1.7% in April 2016 to a seasonally adjusted annual rate of 5.45 million, the National Association of Realtors said.

Most capital goods shares edged lower. Reliance Defence and Engineering (down 3.28%), SKF India (down 2.55%), Thermax (down 1.11%), Jindal Saw (down 0.98%), Lakshmi Machine Works (down 0.78%), Punj Lloyd (down 0.48%), Praj Industries (down 0.47%), Suzlon Energy (down 0.27%) and Siemens (down 0.14%), edged lower. Havells India (up 0.37%), Alstom T&D India (up 0.40%), AIA Engineering (up 0.41%), ALSTOM India (up 0.49%), ABB India (up 0.69%), BEML (up 0.74%), Crompton Greaves (up 1.06%) and Bharat Electronics (up 1.49%), edged higher.

Engineering & construction major L&T was down 0.45% to Rs 1,251.90. The stock hit a high of Rs 1,265.40 and a low of Rs 1,245.10 so far during the day.

Bharat Heavy Electricals (Bhel) edged lower and Power Grid Corporation of India edged higher after the Bombay Stock Exchange (BSE) announced changes in the constituents of its indices as part a semi-annual reconstitution of the indices. Bhel was off 0.42% and Power Grid Corporation of India was up 1.97%. Power Grid Corporation of India will replace Bhel in Sensex with effect from 20 June 2016.

Telecom stocks edged higher. Tata Teleservices (Maharashtra) (up 1.54%), Bharti Airtel (up 1.44%) and Idea Cellular (up 0.73%), edged higher. MTNL was down 0.29%.

Shares of telecom towers company Bharti Infratel were up 2.01%.

Reliance Communications (RCom) was up 0.7%. The company announced on Saturday, 21 May 2016, that based on the substantial progress on the talks so far, the company has decided to extend by 30 days the exclusive discussions for potential combination of its wireless business with Aircel. The revised deadline for the exclusive discussions is 22 June 2016. The discussions, though at advanced stage, are non-binding in nature. There is no certainty that any transaction will result.

Meanwhile, Reserve Bank of India Governor Dr. Raghuram Rajan said in a speech on Saturday, 21 May 2016, that with a view to limit external vulnerabilities arising from the easy and unconventional monetary policy in industrial countries, India is taking measures to control capital inflows, intervening in the foreign exchange market as a macro prudential measure to reduce volatility and maintaining sufficient foreign exchange reserves to be able to withstand a sudden stop in capital inflows. Rajan said that good economic policy is the first line of defence - including the focus on controlling fiscal deficit, reforms like the Bankruptcy Code and Aadhaar and the steady fight against inflation.

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